“CFPB." “Regulation." “ALLL." "Dodd-Frank". “TILA.” “RESPA." “ MDA." "Reg Z." "Appendix Q." "Johnson-Crapo."
Weird. I thought I traveled to Los Angeles for a mortgage technology event, yet it seems the only topics I’ve heard talked about at this week’s MBA Technology Conference are recent changes to regulation and compliance.
At the ResTech Forum sessions yesterday, and the central theme focused on compliance and regulations. While at breakfast this morning, two industry executives sitting at a nearby table mumbled “CFPB," then a long murmuring conversation ensued. Then I heard them say "regulators” followed by more murmuring.
Later in the morning, the “Impact of Recent Regulation” session had as many attendees as the “Big Data, The Cloud, and Mobile Solutions” session running in parallel. (Yes, I counted.)
In the Regulation session, a panelist stated - “Points and fees. It’s complicated. Too complicated to calculate in most systems.” Like most in the mortgage industry, I think the compliance rules and regulations are confusing and can be overwhelming. As John Haring, Ellie Mae’s Compliance Enablement Manager put it - “We need a new term around 'final rule.’”
Okay, we all get it. Regulations are confusing. But where’s the technology part of the conversation?
Instead of stating and restating the onerousness of industry regulations, I wish the conference conversation would focus on how other industries have dealt with regulatory burdens. Instead of worrying about the points and fees on a $100,000 loan, the unequal treatment third party fees, or mortgage insurance requirements at this conference, let’s talk about how advances in technology enable a lender to meet these requirements, even if two separate regulations oppose each other. Instead of worrying about the right to cure processing errors, let’s talk about how deploying good technology removes processing errors altogether.
I met with a senior industry CIO today. He said that the CFPB is very clear about what passes and doesn’t passes their requirements - do this and you pass; do that and your fail. What he doesn’t understand is why today’s technology isn’t compliance-ready at the turn of a dial or a few keystroke of new code. He asked me - "Why doesn’t the technology exist as standard to implement new business rule and workflow requirements to immediately?" I don’t know why not, but I do know it can and it should, so let’s talk about it.
In his keynote this morning, Google’s Director of Ideas Jared Cohen talked about an FDA-approved wifi-enabled pill that travels through a patient’s body taking diagnostics and then automatically sets a doctor’s appointment. He talked about a cell phone charging shoe invented in Africa. He talked about using Bluetooth to organize political protests in the Middle East. This technology exists, so it’s a little perturbing when the mortgage industry finds adhering to a set of business rules just a little too difficult.
Necessity drives innovation.
So let’s talk about the technology solutions that we need to solve this regulation challenge.
After all, I thought this was a technology conference.